Canadian Retailer - Spring 2013 - 20

TARGET IMPACT

“With Target, 70 per cent of their hires
come through colleges and universities,” he
says. “They’re looking for relationships with
schools like ours.”
But Brent Houlden, partner, national practice leader at Deloitte, warns Canada could
lose out on some of the best jobs in retail:
those in head office.
He says with Canadian chains, 10 to 12 per
cent of their profit goes to supporting their
head office, but technology has made it easy
for many U.S. retailers to run their stores from
south of the border—and few people are trying to encourage them to stay here.
“What shocks U.S. retailers is how little
government officials try to woo head offices
and warehouses here,” he says. “We don’t
understand the power of the head office.
They’re good jobs, and they’re well-paying.”

Cross-border conundrum

As seismic as all of these changes may be, some question the sustainability of this volume of retail.
“You’ve got all of these retailers coming in to feed on the Canadian
market,” Danahy says. “It’s the same size pie, and they all have the
same size forks.”
There are also the issues of cross-border and online shopping to
consider. Houlden says online shopping is behind much of the push
for U.S. retailers coming to Canada and that it will influence the
shape their stores take. For example, Nordstrom has been shipping
to Canada for awhile now, and he says it’s no fluke the retailer wants
to set up shop in Yorkdale.
“They’re picking that because that’s where their customers live,”
he says.
This, he says, points to the fact that brick and mortar retailing
could very well be the strongest it’s ever been in the country. It’s also
a reflection of the growth of e-commerce and online sales in Canada
and begs the question: how are those in the industry planning to
expand their online presence and marry it to their physical stores?
But will having ample access to these retailers
take a bite out of cross-border shopping? Not like“By far and away, the draw [to shop
ly, says Douglas Porter, chief economist & managacross the border] is pricing. The reality
ing director, economic research at BMO.
“When you consider the average person who
is if the Canadian dollar was sitting at 80
crosses the border, I doubt many are going exclucents—or even 90 cents—we wouldn’t be sively for Target. Even at two or three stores, I’m
having this conversation.” — DOUGLAS PORTER still not convinced,” he says. “By far and away, the
draw is pricing. The reality is if the Canadian dolBMO
lar was sitting at 80 cents—or even 90 cents—we
wouldn’t be having this conversation.”
Real estate crunch
Recent results from Statistics Canada bear him out. In January,
Despite all the benefits noted by experts in
retail, one issue remains. Where will the re- the number of Canadians visiting the U.S. in January was up 5 per
cent from the year previous.
tailers go?
Just ask Keri Young, the Whitby, Ont., mother who spent two hours
Vacancy rates are below five per cent in
many urban centres, according to James on her first visit to the new Target in her neighbourhood, but still
plans to head south at least once
Smerdon, vice-president, director of retail
a year for a trip to the American
consulting, at Colliers International.
Stay tuned for future issues
version.
This is among the “most dynamic times”
of Canadian Retailer as we
explore more significant
“Oh, there are still some items
his industry has ever seen. For example, he
plays affecting the industry
I like better down there,” she says
says there’s about $2.5-million in retail dein our special series:
velopment expected to happen in metro Van- with a laugh.
Canadian Retail 2013.
couver over the next 5 to 7 years—a figure
Looking ahead
he says some have pegged closer to $7-milThe fickle nature of today’s global economy makes it challenging
lion—and there is $10-million worth of retail
to predict just what the Canadian retail scene will look like in five
projects approved or under development in
or ten years. Though, it is clear that Target is entering the Canadian
Calgary.
market during a time of flux and change. The growth of e-commerce
The real pressure is in ‘A’ grade centres
in urban cores and that’s leading to some and the omni-channel retail experience, increasingly scarce real
estate opportunities, heightened competition for skilled talent, the
unintended consequences for their secondcontinued globalization of the Canadian market, as well as a host of
cousins in more suburban areas. Swedish
other factors, will continue to shape and influence the industry. And
retailer H&M set up its first B.C. store in the
as Target continues to become well and truly immersed within the
Coquitlam Centre rather than the downtown
Pacific Centre simply because it wanted into Canadian market, the impact of its arrival will combine with these
changes to present both challenges and opportunities for retailers
the market, and there was no room in the
across the country.
city’s marquee mall.

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